COVID-19 Widened Gap... Economic Loss Recovery: Billionaires 9 Months vs. Poor 10 Years ↑

[Image source=EPA Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] The COVID-19 pandemic has further intensified the inequality between billionaires and the extremely poor. According to the 'Inequality Virus Report' released by the international relief organization Oxfam, while billionaires worldwide took nine months to recover from the economic losses caused by COVID-19, it is estimated that the extremely poor will take more than ten years to recover.

On the 25th (local time), Oxfam presented the report 'Inequality Virus' at the high-level meeting 'Davos Dialogue' of the World Economic Forum (WEF) annual meeting 'Davos Forum.' According to the report, the total assets of billionaires worldwide reached $11.95 trillion (approximately 1,317.5 quadrillion KRW) at the end of last year, an increase of $3.9 trillion (approximately 430 quadrillion KRW) compared to mid-March last year, the early stage of the pandemic. This means they recovered to pre-pandemic levels in just nine months.

Oxfam stated that the current total assets of billionaires are comparable to the amount of money the Group of Twenty (G20) countries have poured into combating the COVID-19 pandemic.

The net assets of billionaires ranked in the top 10, including Elon Musk, CEO of electric vehicle company Tesla, and Jeff Bezos, CEO of Amazon, increased by $540 billion (approximately 595 trillion KRW) during the same period (March to December last year).

The billionaires whose assets increased the most were Musk and Bezos, with increases of $128.9 billion and $78.2 billion, respectively.

The reason billionaires increased their wealth during the crisis is attributed to the stock market boom.

Oxfam explained, "In March last year, the global stock market experienced the worst shock of this century, causing billionaires' financial assets to decline initially but then recover. The assets of the top 1,000 billionaires returned to pre-COVID-19 pandemic levels within nine months," contrasting this with the five years it took for billionaire assets to recover after the 2008 financial crisis.

They added, "While the real economy is experiencing its worst recession, the stock market is booming because central banks are injecting tens of billions of dollars to prevent a crash. Meanwhile, government responses to support the real economy have been unstable."

The recession in the real economy is expected to significantly increase the number of people living in poverty.

The UK-based international poverty eradication organization Development Initiatives estimated that the number of people living on less than $5.5 (approximately 6,000 KRW) per day increased by at least 200 million to as many as 500 million last year.

Oxfam pointed out, "Following the worst economic shock since the Great Depression, the downward trend in poverty over the past 20 years is expected to reverse," adding, "The number of people in poverty may not return to pre-COVID-19 pandemic levels even after ten years."

Many economists agreed with the forecast that the COVID-19 pandemic would widen inequality.

According to a survey conducted by Oxfam of 295 economists from 79 countries, 87% and 78% agreed that income and asset inequality, respectively, would deepen due to the COVID-19 pandemic.

Furthermore, 56% and 66% agreed that inequality based on gender and race would worsen.

Oxfam emphasized, "History will record the COVID-19 pandemic as the first time in history when inequality deepened simultaneously in virtually every country," and stressed, "Inequality is not inevitable, and if governments take action, it is possible to return to pre-pandemic levels within three years."